High-tech toys with grown-up prices top kids' Christmas lists

Toy makers like such passion. And this year, they are selling more toys that cost upward of $100 after watching consumers spend big bucks for iPods and game consoles during past seasons.

Even though the toys are pricey, parents like Pete Jarvis are willing to pay. "This will be her big present," said Jarvis, 36, of Pasadena.

The $10 Barbies and Legos aren't going away. But toy makers are betting that a blend of high-tech wizardry with life-like horses, Jeeps and robots will get young shoppers to put such extravagant items on their Christmas lists.

Industry consultants believe it could be a watershed year for high-priced toys as consumers decide whether they will fully embrace them. For their part, toy company executives are confident that they can harness the same kind of success that their electronic competitors have enjoyed for years.

"There is an evolution in the toy business for higher-priced toys," said Kevin Curran, senior vice president and general manager for Fisher-Price's core products. "The truth is because of the ever-lower cost that we're finding especially for electronics, we're able to bring a lot more value to parents more than ever before."

For the first time this holiday season, Toy Wishes magazine's annual list of 12 hot toys includes three items priced $200 or more: Hasbro's Butterscotch My Furreal Friends Pony ($299.99), Lego Mindstorms NXT robot ($249.99) and the Nintendo Wii ($250). By contrast, the most expensive toy on last year's list was the Leapster L-Max Learning game system at $99.99.

"I see toys come through all the time, and this year, out of many years, I remember saying, `Wow, this is expensive. Wow, that is expensive,'" said Marianne Szymanski, founder of Toy Tips, a research group that tests toys and children's products, and Toys Tips & Parenting Hints magazine.

What's different this year is that as prices of technology components such as microchips have dropped, toy manufacturers have created more high-tech items at somewhat affordable prices. Just a few years ago, these same products would have cost hundreds more to make and sell, toy makers said.

And more toys resemble electronics products, blurring the line between what is a toy and what is a gadget. Within the toy industry, sales of youth electronics are growing while those of such traditional products as action figures have been steadily declining during the past few years.

Take the Butterscotch pony, a 3-foot-tall toy infused with sensors and puppetry. Or Power Wheels Jeep Hurricane, a replica created by Fisher-Price and for sale at $399.99. And toy maker Zizzle's Pirates of the Caribbean-theme pinball machine for $349.99.

Christmas staple

Despite a slowdown in the housing market and concerns over energy prices, toys remain a staple holiday gift. Early retail reports reflect a strong showing for toy stores. And major retailers, such as Toys "R" Us and KB Toys, are reporting brisk sales of the higher-priced items.

Even among the Toy Wishes magazine's best-of categories, more higher-priced toys are making their debut than ever before, said Jim Silver, editor-in-chief of Toy Wishes.

Toy manufacturers have "seen how consumers have spent a lot of money on video games, iPods, and that they're willing to spend money if they get a better experience," Silver said.

In other words, parents are opening their pocketbooks a little wider, as long as the toys have educational or entertainment value.

Last year, the number of toys that sold for $100 or more increased by 11 percent from 2003, according to the NPD Group, a consumer market research firm in Port Washington, N.Y. And industry analysts said there are more this year.

Wow and cool

Anita Frazier, a toy analyst at NPD Group, said several $100 toys were top sellers last year because parents are becoming more "price insensitive for some of the things they want to buy for their children, especially if they have the wow and cool factor."

In fact, consumers are expected to spend on average of $153, up 12 percent from last year, according to the market research firm.

Manufacturers say higher-priced toys represent a small portion of the $22 billion-a-year market and a vast majority of items are still affordable to most shoppers. The average retail price for a toy last year was $7.18, according to the NPD Group.

"The sweet spot is still going to be in the $25-to-$40 range for many of the toys," said Ernie Speranza, chief marketing officer for KB Toys.

Nevertheless, the big-ticket toys, such as the Butterscotch pony, are leaving the store as soon as they arrive, Speranza said.

Expensive toys have always been available at high-end stores such as New York's famed FAO Schwartz. That company has built a reputation on feeding a child's toy fantasy with a kid-sized Mercedes for $650 or a dollhouse customized to look like the child's home that starts at $10,000.